Correlation Between Sachem Capital and Realty Income
Can any of the company-specific risk be diversified away by investing in both Sachem Capital and Realty Income at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sachem Capital and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and Realty Income, you can compare the effects of market volatilities on Sachem Capital and Realty Income and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sachem Capital with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Realty Income.
Diversification Opportunities for Sachem Capital and Realty Income
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sachem and Realty is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and Sachem Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sachem Capital Corp are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Sachem Capital i.e., Sachem Capital and Realty Income go up and down completely randomly.
Pair Corralation between Sachem Capital and Realty Income
Given the investment horizon of 90 days Sachem Capital is expected to generate 4.48 times less return on investment than Realty Income. But when comparing it to its historical volatility, Sachem Capital Corp is 1.47 times less risky than Realty Income. It trades about 0.05 of its potential returns per unit of risk. Realty Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,226 in Realty Income on November 9, 2024 and sell it today you would earn a total of 203.00 from holding Realty Income or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sachem Capital Corp vs. Realty Income
Performance |
| Timeline |
| Sachem Capital Corp |
| Realty Income |
Sachem Capital and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Realty Income
The main advantage of trading using opposite Sachem Capital and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital position performs unexpectedly, Realty Income can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Realty Income will offset losses from the drop in Realty Income's long position.| Sachem Capital vs. SCCG | Sachem Capital vs. B Riley Financial | Sachem Capital vs. B Riley Financial | Sachem Capital vs. B Riley Financial, |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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